The Department of Health (DOH) on Sunday expressed support to the growing clamor of lawmakers, led by House Speaker Feliciano Belmonte Jr., for a congressional probe into the alleged “sin” tax malpractices of tobacco firm Mighty Corp.
DOH Spokesman Dr. Lyndon Lee Suy said the agency would be more than willing to cooperate should the Congressional Oversight Committee proceed with the proposed investigation on the supposed excise-tax liabilities of the Bulacan-based cigarette maker.
Lee Suy said the alleged noncompliance of companies like Mighty Corp. with the law has a huge impact on the country’s health-care system.
“Willing kaming makipag-coordinate para malaman kung mayroon ngang hindi sumusunod [sa batas] para sa gayon ay mabigyan din ng sapat na aksyon at ma-address ang mga concerns na ’yan, [We’re willing to coordinate to find out if there are noncompliant companies so we can take appropriate action and address these concerns],” Lee Suy said.
Lee Suy said noncompliance to the sin-tax law would adversely affect the DOH’s national budget allocation, which it uses to finance various health campaigns
and activities.
The sin tax law, or Republic Act 10351, is one of the anti-smoking measures passed by the Aquino administration, with the aim of increasing cigarette prices and alcoholic drinks, thereby making them unaffordable for the youth and the poor.
Under the law, 85 percent of sin-tax revenues is allocated for the enrollment of the poorest of the poor to the Philippine Health Insurance Corp. (PhilHealth).
Mighty Corp. has been receiving flak for selling its products at economically unsustainable prices—even below the cost of production, excise tax and value-added tax.
Thus, cigarettes priced at P1 per stick continue to flood the market, defeating the spirit of the law. Tobacco giant Philip Morris Fortune Tobacco Corp. and other local cigarette makers have accused Mighty of alleged nonpayment of correct taxes and duties, which enables it to sell its products at a loss-and-gain market share.
Last week Belmonte, Senators Antonio Trillanes IV and Juan Edgardo Angara called for a congressional inquiry into allegations involving Mighty Corp., and as to why the Bureau of Internal Revenue (BIR) has not lifted a finger on Mighty’s alleged fraudulent practices to evade hundreds of millions of pesos in tax and duty payments.
The speaker made the call following reported funding shortfalls for the government’s universal health-care program.
Specifically, Belmonte said he wants lawmakers to look into why Mighty Corp. has grown so big in so short a time; whether private companies are paying the right taxes; whether government agencies, like the BIR and the Bureau of Customs, are doing their duty in collecting the proper taxes and duties; and whether sin-tax collections were being used for the designated beneficiaries, specifically the DOH.
But, aside from Mighty Corp., Lee Suy said the DOH is also interested in the aspect of how sin-tax revenues are being allocated and utilized under the government’s universal health-care program.
Records of the Department of Finance show that, of the P91.6-billion revenues from the sin-tax law in the first 11 months of 2013, about P61.622 billion came from tobacco products, while the remaining P30 billion came from alcoholic drinks.
5 comments
The inaction of those in the proper governing agencies on this case sends out a very bad message. Those involved in illicit tobacco activities will only get more encouraged.
It is obviously in everyone’s interest to get to the bottom of the illicit practices allegations against Mighty, everyone is now calling for some action to be taken. Everyone, that is, except for the BIR itself. Why?
They have their own reasons…what, nobody knows. They should be investigated as well and held accountable for allowing Mighty to carry on with all the alleged illicit practices.
It’s good that the DOH has finally spoken on the matter. If this issue was simply left on the BIR’s hands, it seems like they would simply allow Mighty to carry on with these alleged illicit practices.
A probe is long overdue, considering we have been losing billions because of these loopholes.